On the one hand, of course, reducing the number of single-use plastic bags is a noble aim. But on the other hand, it does seem a bit like the Netherlands at its most narrow-minded when, for example, you have to pay an extra 5 eurocents for a plastic bag in a shop. Especially when you factor in the VAT implications.
Plastic bag = packaging?
The first VAT question that arises is whether the supply of the bag is included in the supply of the goods being carried in it. If the goods are subject to VAT at the standard rate (21%), this is of course irrelevant. However, if the reduced VAT rate (6%) applies to the supply of the goods, the question arises as to whether that rate also applies to the bag.
For VAT purposes, a product’s packaging is considered part of that product. After all, the packaging has no independent significance for the consumer.
This is not the case where the packaging constitutes an additional service, where the packaging has an independent practical value, or where the packaging represents a monetary value that is significant in relation to the value of the packaged product.
The Tax and Customs Administration takes the view that a plastic bag, for which a separate charge must be made under the legislation in force since 1 January 2016, does not qualify as packaging included in the supply of the product. In other words: VAT on the packaging must be calculated separately from VAT on the packaged product. The Tax and Customs Administration regards the sale of such a plastic bag as an ancillary service.
Conclusion
Once it is clear which VAT rate should be applied, the question arises as to whether VAT needs to be paid at all. After all, the VAT on a bag costing €0.05 amounts to: 21/121 * €0.05 = €0.009. Less than 1 eurocent!
However, the VAT payable must be rounded to the nearest euro cent, using the arithmetic method. This means that amounts of €0.005 and above are rounded up. VAT of 1 euro cent must therefore be paid on the €0.05 bag.
Only whole euros may be included in the VAT return. For each section of the VAT return, VAT amounts are rounded to the nearest whole euro in favour of the business owner.